Product mix & product line Why change product breadth/depth

• Product mix is a complete set of all goods or services offered

by the firm
• Product lines are a group of associated items that consumers
tend to think of as part of a group
• Product breadth (variety) represents the number of product lines
offered by the firm (variety of products)
• Product depth equals the number of products within a product line
Product breadth
• Add new product categories to capture new or evolving
markets
• Increase sales and compete in new venues
• Address changing marketing conditions or meet strategic
decisions
Product depth
• Address changing consumer preferences
• Pre-empt competitors while boosting sales
• Realign resources (e.g. manufacturing, raw materials)

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Managing products over time Product life-cycle

• Very few companies deal with only one
product
• Changes occur because of technological
improvements, changing tastes & preferences
• Product Life Cycle describes the stages that a
new product goes through from beginning to
end
• Marketing Mix usually changes during this cycle, because:
Product: new idea introduced to the marketplace

Introduction
• customers’ attitudes & needs change
Sales: low sales negative/low profit $high price
• the product is aimed at entirely different target markets
Competition: one or few
• competitive usually move towards pure competition (broad range of
competitors selling the same product) Company: marked by losses
(large costs in production, distribution and promotion)
• Competitors’, sales, profitability and demand vary in each stage of Marketplace: customers’ take time to realise that the product
the Product Life Cycle is available / only innovators adopt

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 Product life-cycle Product life-cycle

Product: market & competitors aware of product potential Product: product & alternatives fully immersed in the market
Sales: sales rising rapidly highest profits $high price Sales: sales level off profits decline $price cuts

Maturity
Growth

Competition: few but increasing (notice opportunity & improve product) Competition: high number of competitors/competitive products
(company profits drop) (notice opportunity & improve product) (company profits drop)
Company: large sales and profits / competitor analysis needed Company: promotion costs rise / company cuts price to
(dangerous if competition is overlooked) compete in the marketplace
Marketplace: few but increasing / early adopters & early majority Marketplace: many consumers/ late adopters

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Product life-cycle
Quick Quiz
Which product life-
cycle will see firms
experience their
highest profits?
Product: new products replace old  enter niche markets
Sales: sales decline profits decline $price low
Decline

Competition: low number of competitors & products

Company: consider potential new markets (countries, cohorts)
OR transfer expertise into the domestic market
Marketplace: loyal consumers OR fad consumers / laggards

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 Quick Quiz Quick Quiz
which product life- What are the four
cycle see will firms stages of the
experience their product life-cycle?
highest profits?

Growth market

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Quick Quiz
What are the four
stages of the
product life-cycle?

Introduction market
Growth market
Maturity market
Decline market

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